Society Maintenance Charges in India: Rules, Calculation and Bye-laws

Society maintenance charges in India

Almost every dispute about maintenance charges comes down to one of three questions: what may the society charge for, how should the total be split between flats, and who gets to decide.

The answers are not a matter of committee preference. They come from the co-operative societies act that applies in your state, the model bye-laws adopted under it, and your society's own registered bye-laws. A committee that sets charges by consensus at a meeting, without reference to those, is creating a liability — and members who understand this are the ones who win at the registrar.

This page sets out the heads of charge, the calculation methods and which one applies to which head, the specific limits that catch societies out, and how the position differs across the major metros.

Bye-laws, rates and thresholds are revised periodically and vary by state. Treat this as a working guide and confirm your society's position against your registered bye-laws and your auditor before you levy anything.

The heads of charge

Maharashtra's model bye-laws for co-operative housing societies set out the heads a society may levy, and most states follow a broadly similar structure. Understanding the list matters because the head determines the split — you cannot decide to divide everything equally, or everything by area, whichever is politically easier.

"Service charges" is the head that surprises people. It covers the society's running costs — security, housekeeping, staff salaries, office expenses, audit fees, common area upkeep — and under the model bye-laws it is divided equally per flat, not by area. The rationale is that a security guard and a sweeper serve a 600 sq ft flat and a 1,800 sq ft flat identically.

This is the single most common source of committee error and member grievance. Owners of large flats often assume everything is per square foot; owners of small flats often assume everything is equal. Both are wrong, and the bill has to be built head by head.

The three calculation methods

Equal split. Total divided by number of flats. Applies to service charges, common electricity, lift maintenance and the education fund. Simple, and defensible precisely because the bye-laws specify it.

Per square foot. Rate multiplied by carpet or built-up area. Applies to the repairs and maintenance fund, sinking fund, insurance and lease rent. Be explicit about which area measure you use — carpet, built-up or super built-up — and use the same one consistently. A society that switches basis mid-stream invites a challenge.

Per unit consumed or assessed. Water by inlets, property tax by the municipal assessment for that flat. These pass through what is actually attributable to the flat.

In practice a correct bill is a hybrid: several heads, each on its proper basis, itemised separately. A single blended "maintenance charge" of ₹4.50 per sq ft is easy to compute and hard to defend, because it silently applies an area basis to heads the bye-laws say must be equal.

The sinking fund

Under the Maharashtra model bye-laws, the sinking fund is to be collected at a rate decided by the general body, subject to a minimum — commonly expressed as 0.25% per annum of the construction cost of each flat, excluding the cost of land. The repairs and maintenance fund is separately pegged at a minimum, commonly 0.75% per annum of construction cost.

Two rules matter more than the exact percentages. The sinking fund is not working capital: it is for major structural repair and reconstruction, and drawing on it needs general body approval, often with the registrar's permission. And it should be held in a separate, identifiable investment, not merged into the current account where it quietly funds the annual painting.

Non-occupancy charges

Where a flat is let out rather than occupied by the member, societies may levy a non-occupancy charge. In Maharashtra this has long been capped by government circular at 10% of the service charges, excluding municipal taxes — a limit upheld by the Bombay High Court, with societies charging more having been ordered to refund the excess.

Committees routinely get this wrong in two ways: computing the 10% on the whole maintenance bill rather than on service charges alone, and levying a flat "tenant charge" of a few thousand rupees with no bye-law basis at all. Both are recoverable by the member.

A non-occupancy charge also cannot be used as a device to discourage letting. Refusing permission to let, or loading charges to make it uneconomic, is a different and more serious problem.

GST on maintenance

Two conditions must both be met before GST applies to a society's maintenance collection: the society's aggregate annual turnover must exceed the registration threshold, and the monthly contribution per member must exceed the per-member exemption limit, which was raised to ₹7,500 with effect from January 2018.

Where both are crossed, GST at 18% applies. Whether it applies to the whole amount or only to the excess over ₹7,500 has been litigated — the Madras High Court held that only the excess is taxable, while the revenue's own circular took the contrary view. The position has not been uniform across jurisdictions.

Property tax and water charges collected and paid to the local authority are generally treated as pure agent recoveries and excluded from the computation.

Given the unsettled position, get a written view from your society's auditor. Do not copy a neighbouring society's treatment, and do not print a GSTIN on a receipt if the society is not registered.

Who decides, and how

Charges are proposed by the managing committee and adopted by the general body. Practically:

1. The committee prepares a budget for the coming year, head by head.
2. The proposed charges are circulated with the AGM or SGBM notice, within the notice period the bye-laws require, with the agenda item stated explicitly.
3. The general body meets, quorum is verified, and the resolution is put to a vote.
4. The result is recorded in the minutes, with the figures.
5. Charges are levied from the date the resolution specifies — not retrospectively unless the resolution says so and the bye-laws permit it.

Skip a step and the levy is challengeable. The most common failure is a revision decided by the committee alone "pending ratification at the next AGM", which is exactly the sequence a member's lawyer will attack.

How the metros differ

The underlying logic is similar everywhere, but the governing statute is not.

Mumbai and Maharashtra. Co-operative housing societies under the Maharashtra Co-operative Societies Act, 1960, with model bye-laws that set out the heads and the split in unusual detail. This is the most prescriptive regime in the country, and the 10% non-occupancy cap applies. Per-square-foot blended rates are common in practice but sit uneasily with the bye-laws.

Delhi NCR. A split landscape. Registered co-operative group housing societies fall under the Delhi Co-operative Societies Act, 2003; most RWAs in builder colonies are registered under the Societies Registration Act, 1860, whose framework is far lighter. In Gurugram and Faridabad the Haryana Apartment Ownership Act applies to condominiums; in Noida and Ghaziabad, the Uttar Pradesh Apartment Act, 2010. Because RWA regulation is thinner here, the society's own registered bye-laws and the maintenance agreement with the builder do more of the work — read both.

Bangalore and Karnataka. Co-operative societies under the Karnataka Co-operative Societies Act, 1959; apartment associations more often under the Karnataka Apartment Ownership Act, 1972, or registered as societies under the Karnataka Societies Registration Act, 1960. Per-square-foot charging is the prevailing norm in large apartment complexes, and association bye-laws typically provide for it expressly.

Hyderabad and Telangana. The Telangana Co-operative Societies Act, 1964, and the apartment ownership legislation for condominiums. Gated communities frequently operate through an association with builder-drafted bye-laws carried over at handover — worth reviewing rather than inheriting unexamined.

Chennai and Tamil Nadu. The Tamil Nadu Apartment Ownership Act, 1994, and the Tamil Nadu Societies Registration Act, 1975, for associations. Chennai associations commonly split by area with an equal component for services.

Pune. Same Maharashtra regime as Mumbai. Larger townships often layer a facility-management agreement on top of the society structure, which does not displace the bye-laws — a management contract cannot authorise a charge the bye-laws do not permit.

Getting the bill right

Whatever the state, a defensible maintenance bill has the same properties:

• Itemised by head, so a member can see what each component is and on what basis it was computed
• The same formula for every flat in comparable circumstances
• Traceable to a general body resolution, referenced on the bill or available on request
• Arrears and interest shown separately, never folded into the current charge
• A numbered receipt issued on payment, from an unbroken sequence
• Consistent area basis across every area-based head

If a member asks "why is my bill ₹6,240?" and the committee cannot answer head by head in two minutes, the billing is not defensible — regardless of whether the total is fair.

How this works on Plinth

Charge heads are configured per society with their own basis — equal, per square foot, or per unit — so service charges divide equally while the repairs and sinking funds follow built-up area, in the same bill, without anyone recomputing it in a spreadsheet.

Bills are itemised by head, so the member sees the composition rather than a single number. Arrears and interest carry as separate lines. Receipts are numbered from an unbroken sequence and, once issued, cannot be quietly edited — corrections go through a documented reversal.

Because the flat roster is the same one used for voting, the general body resolution that adopts a charge and the bills raised under it refer to the same members, and every posting is written to the society's append-only audit log.

Frequently asked questions

How are maintenance charges calculated in a housing society? Head by head, not as one number. Service charges, common electricity and lift maintenance divide equally per flat; the repairs fund, sinking fund and insurance go by built-up area; water goes by inlets and property tax by municipal assessment. The bill is the sum of those.

Can a society charge maintenance per square foot? For the area-based heads, yes. Applying a single per-square-foot rate to everything, including service charges that the bye-laws require to be divided equally, is the part that is challengeable.

What is the maximum non-occupancy charge? In Maharashtra, 10% of service charges excluding municipal taxes, per the government circular upheld by the Bombay High Court. Other states vary; check your bye-laws.

Is GST payable on society maintenance? Only if the society's turnover exceeds the registration threshold and the per-member monthly charge exceeds ₹7,500. Whether the tax applies to the full amount or only the excess has been litigated — take your auditor's written view.

Can maintenance charges be increased without an AGM? No. A revision needs a general body resolution passed with proper notice and quorum. A committee cannot revise rates on its own and ratify later.

Do owners of vacant flats have to pay? Yes. Liability attaches to the flat, not to occupancy. A member cannot avoid charges by leaving a flat empty.

Must ground-floor flats pay lift charges? Under the Maharashtra model bye-laws, yes — lift maintenance is shared equally among all flats, including those on the ground floor. Some societies resolve otherwise; that needs a general body decision and is a frequent source of dispute.

Step-by-step guides

• Admin: Run a Billing Cycle & Issue Invoices
• Admin: Set Up Charge Heads & GST
• Maintenance Billing Troubleshooting
• Resident: View Dues & Download Receipts
• Admin: Preview, Approve & Issue a Billing Cycle

Related: GST on society maintenance charges · how to pay your maintenance bill online · maintenance dues reminders and escalation · society financial statements